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A small package of fake IDs coming from Canada helped bring down Silk Road, a billion-dollar drug empire operating in the deeper recesses of the internet.

On Tuesday, the Federal Bureau of Investigation arrested Ross William Ulbricht, accusing him of being the mastermind behind what could be considered the eBay of the dark side, where shoppers could buy narcotics, guns, hacking software and forged ID. There were even hit-men posted for hire.

Federal prosecutors charged Ulbricht, 29, a San Francisco resident, with one count each of drug trafficking, computer hacking and money laundering.

Silk Road operated under the cloak of anonymity in the “Deep Web,” using software such as Tor, which makes tracing users virtually impossible. The site also used Bitcoins, an anonymous, untraceable digital currency.

According to a complaint filed by the FBI in a New York court, Silk Road built up a clientele of more than 900,000 registered users as it connected thousands of drug dealers around the globe. For its services, it charged users commissions of 8 to 15 per cent, depending on the size of the transaction.

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The complain said Ulbricht turned the bizarre bazaar into a money maker in just 2½ years, with $1.2 billion in revenue and $80 million in commissions.

The FBI — which made over 100 purchases of drugs, later tested to have high purity levels — had been tracking the site for months but had trouble identifying the ringleader behind the alias “Dread Pirate Roberts” (in homage to The Princess Bride).

That is, until a routine inspection by U.S. Customs and Border Protection of a package from Canada.

On July 10, the border guards randomly checked a package that turned out to contain nine counterfeit identity documents. They all had the same photo — but the name in each was different.

On July 26, Homeland Security investigators showed up at the San Francisco address written on the package. There they met Ulbricht. He said little to investigators about the fake IDs, Silk Road and Tor. His roommates, who knew him only as “Josh,” said he “was always home in his room on the computer.”

But step by tiny step the FBI pierced the veil of secrecy surrounding Tor and Silk Road and began to track Dread Pirate Roberts’ private messages. Those messages revealed that not only was Ulbricht the leader of Silk Road, he was also a customer.

According to court filings, a user named FriendlyChemist began threatening on March 13 to reveal the identities of thousands of users and dealers on the site. For his silence, FriendlyChemist wanted $500,000.

As a token of his credibility, FriendlyChemist provided Dread with users’ names, which he obtained by hacking another Silk Road user.

Dread, being an online drug kingpin, wanted blood. So he allegedly sought out the services of the hitmen listed on his own site.

“In my eyes, FriendlyChemist is a liability and I wouldn’t mind if he was executed,” Dread wrote to redandwhite, a purported online hitman, court documents say.

On March 29, FriendlyChemist gave Dread 72 hours to pay or he would go public with names. A few hours later Dread wrote to redandwhite: “I would like to put a bounty on his head if it’s not too much trouble for you.”

They went back and forth on price, with redandwhite suggesting as much as $300,000 for the killing.

Dread at one point said: “Don’t want to be a pain here, but the price seems high. Not long ago, I had a clean hit done for $80k. Are the prices you quoted the best you can do?”

The two settled on $150,000 to take out FriendlyChemist. Dread gave out the man’s real name and a White Rock, B.C. address where he lived. He provided the cash in Bitcoin form.

On April 1, redandwhite wrote back, saying, “Your problem has been taken care of … Rest easy though, because he won’t be blackmailing anyone again. Ever.” A few days later he sent Dread a picture of the victim.

FBI Special Agent Christopher Tarbell, who wrote the complaint filed in court, said he spoke to police in B.C. and they told him there’s no record that a man by that name existed. They also had no record of a homicide in the White Rock area around that date.

The FBI continued to trace Dread’s online crumbs, which led them to an internet café near Ulbricht’s San Francisco apartment. They also found a connection between Dread, Silk Road and Ulbricht’s Gmail address that, ultimately, led to his arrest Tuesday.

Now Silk Road has been shut down and advertisements like “High Quality #4 Heroin All Rock” have vanished into the ether.

One buyer, themanwhocan, gave that particular product a glowing review: “Quality is superb, deffinitly (sic) worth the high price to get a more pure product which makes it more cost effective. Best stuff ive seen in a while.”

Now the stuff is gone.

With files from Reuters

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